Regions and Innovation: Collaborating Across Borders

OE‌CD Reviews of Regional Innovation

This report addresses three core questions with respect to supporting innovation policy in cross-border regions:

• Why and when does it make sense to collaborate cross-border for innovation?• How can public and private actors work together cross-border (governance)? • What are the policy instruments for cross-border innovation collaboration?

To be globally competitive, regions need to take into account the dual innovation phenomena of increasing international linkages and the persisting importance of geographic proximity. For many regions along international borders, collaborating with an international neighbour may makes sense for innovation-driven growth.

Finding the right governance arrangements for collaboration is perhaps the most complex task for cross-border innovation policy. An overarching vision for collaboration is a useful place to start, but often there are different experiments that serves as examples for why collaboration can help.

Innovation-driven economic development is a field where jurisdictions are also competing, but the real competition is not with the neighbour, it is on a global scale, implying potential for “co-optition” (co-operation for competition). Cross-border instruments that contribute to an overall strategy are more likely to have economic impact than if they are simply a collection of different projects.

Key facts and policy issues

Place matters for innovation. Over 33% of R&D and around 25% of skilled employment occurs in the top 10% of OECD regions (large-scale regions). Patent activity is 58% in the top 10% of OECD regions (small-scale regions). Different measures of the benefits of innovation activities find that the strongest interactions take place in proximity, within a radius of approximately 200 kilometres.

The increasing globalisation of innovation is also forcing regions to think beyond their borders, but those borders do remain a barrier, even for neighbouring regions. The share of patents with a foreign co-inventor has doubled over the last three decades, from 10% to 20%. The share of scientific publications with an international co-author has tripled, from around 7% to 22%. However, data indicate that border barriers overtake proximity benefits. In North America and in Europe, the probability of citing a patent in a neighbouring foreign region is no different than citing one in any foreign region. The importance of the barrier appears to be increasing, particularly in North America.

However, many regional strategies for regions along international borders (including the “smart specialisation” strategies designed for use of EU funds) don't take this cross-border dimension into account, constituting a missed opportunity. As many innovation policy instruments and policies for framework conditions are managed by national governments, regional and local governments need to identify where national action can help or hinder their efforts. Given that national funds often stop at the border, different strategies to finance joint cross-border actions are needed.

Recommendations

Key recommendations for defining the cross-border area include:

Understand what the data show, but don’t wait for complete data to start collaborating.

Only pursue the cross-border element when it makes sense.

Allow a certain degree of flexibility in the area definition to avoid creating unhelpful new borders.

Do not under-estimate the importance of other “hard” and “soft” factors beyond innovation.

Key recommendations on the governance of cross-border collaborations include:

Give politicians a reason to care about the issue, understanding that their time horizon and motivations are generally short-term.

Identify for national (supra-national) governments where they can help cross-border efforts.

Understand the different costs and benefits, and the alignment of those across the border, for cultivating long-term collaboration that builds trust.

Engage non-public actors in governance, with some form of secretariat to underpin the work of the official, even if informal, governance body.

Key recommendations to make cross-border instruments work include:

Devote more efforts to strategy development and policy intelligence.

Mainstream the cross-border element in national and regional innovation strategies and policy instruments, or at least align programme rules.